Taking a loan can be a complicated process for most people. The illustration below indicates what to expect at every step during the loan evaluation process. It helps understand how the credit decisioning works in banks and the steps they take before deciding to accept or reject a loan/ credit card.

750 IS GENERALLY CONSIDERED A GOOD SCORE 79% of the loans or credit card disbursed are to individuals with a CIBIL Score greater than 750.

WHAT DO THE BANKS BROADLY CHECK FOR?

Suit filed or written off cases reported in the Credit Information Report [CIR]. This is indicated in the 'Account Status' section of your CIR

Payment history trend - if there has been any default or amount overdue. This is indicated in the 'Days Past Due' [DPD] field of your CIR

Company profile where you work - the banks generally have an approved list to whom they extend loan / credit card.

EMI to Income ratio : if your current total EMI exceeds your monthly salary by more than 50% then chances of getting loan are reduced. Let's take the help of an example to understand this further.

DETERMINATION OF ELIGIBILITY

Case 1 *

Income : 50,000

Total EMI's being paid : 10,000

EMI to Income Ration : 20% [10,000 / 50,000]

Rule of thumb EMI to Income Ratio: 50% [lenders assume you will need half salary for living expenses].